Sep. 13, 2013

Written by

Jeff Montgomery

The News Journal

The founder of Delaware’s iconic Grotto Pizza chain has sued his former attorneys for negligence, after time ran out on a planned multimillion-dollar fraud and conspiracy lawsuit targeting retired federal judge Joseph J. Farnan Jr., two family members and associated companies.

The rare professional negligence claim against Duane Morris LLP and three of its attorneys threatens to lay bare tangled allegations by Grotto founder Dominick A. Pulieri that Farnan befriended him in the 1980s and gradually took control of his personal and company dealings.

Over time, the malpractice complaint said, Farnan brought family members and hand-picked associates into well-paid or influential jobs with Grotto interests, setting up deals, land buys and leases that allegedly benefited Farnan’s interests at Pulieri’s expense.

“In hindsight, what seemingly began as an innocent and budding friendship was the calculated seduction of a childless businessman by someone who appeared to have the prominence and integrity of a federal judge,” the suit said.

Most of the allegations — outlined in the lawsuit and a separate, 29-count, 102-page Chancery Court suit drafted last year but never filed — date to the 1990s and the first half of the last decade. The Chancery Court draft was filed as an exhibit in the negligence suit, filed in Sussex County Superior Court.

Pulieri and his company interests broke some, but not all, connections with Farnan starting in 2004, according to the negligence lawsuit.

Farnan, a U.S. District Court judge for 25 years and a former U.S. attorney for Delaware, retired from the bench in 2010.

“The complaint against Duane Morris by Dom Pulieri is riddled with inaccuracies and outright fiction about my family and me,” Farnan said Tuesday.

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“Indeed, after a full investigation spanning two years, Duane Morris apparently determined that Mr. Pulieri had no credible claims,” Farnan said. “I am confident that any examination of the actual facts will expose Mr. Pulieri’s distortion of our relationship and the false allegations in the complaint.”

Joshua Peck, senior media relations manager with Duane Morris, said in a statement Tuesday that the firm “appropriately handled the matter and expects to prove that as the facts unfold.”

The lawsuit said Pulieri and his advisers began looking deeper into Farnan’s actions in 2009 after a Grotto vice president found a $2.4 million discrepancy between the amount DelDOT paid in May 2002 for a former Grotto property at Del. 273 and Old Baltimore Pike and the amount Farnan reported to Pulieri in a handwritten settlement sheet.

Other “actionable transactions” came to light, the malpractice suit claimed, involving claims that Farnan steered an unknowing Pulieri into development deals, loans and property sales that benefited the former judge at Pulieri’s expense.

“Once Mr. Pulieri discovered this egregious breach of fiduciary duty and trust in June 2009, he fully understood that the trust he had placed in and reliance upon the Farnan family had been seriously and tragically misplaced,” the suit said.

Kevin W. Gibson, a partner in the law firm that brought the negligence case, declined to discuss the action in detail, but said he had confidence in its claims.